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Understanding Uninsured Motorist Coverage

Understanding Uninsured Motorist Coverage
Matthew Collister
Updated September 14, 2021
7 Min Read

Uninsured motorist coverage ensures your insurance company will pay for your medical bills and other expenses if you’re in an accident caused by a driver who is not insured. Without this coverage, you may end up having to pay for these expenses out of your pocket. The coverage is mandatory in many states and optional in others.

How uninsured motorist coverage works

Imagine you’re in a car accident. It’s clearly not your fault — let’s say the other driver runs a stop sign and hits your car’s front end. Your car is damaged, and you’re headed to the hospital to have some injuries treated.

Typically, the other driver’s liability coverage pays for your medical bills and other expenses related to your physical recovery. It should also pay to repair or (if needed) replace your car. 

But what if the other driver is among the 13 percent nationally who doesn’t have liability coverage? Not only are they on the wrong side of the law (liability coverage is required in nearly every state), but it might seem like those car repair and medical bills are going to be paid out of your pocket. 

This is why you should consider having uninsured motorist coverage on your policy.

With this coverage — in the situation described above — your insurance company pays for your medical bills, and possibly your car repair bills. 

What uninsured motorist coverage pays for

Uninsured motorist coverage is required by law in about 20 states and is optional in the others. It breaks down into separate coverages on your car insurance policy. 

  • Uninsured motorist bodily injury — Covers your (and your passengers’) medical bills. It may also cover lost wages if you can’t work due to your injuries, compensation for pain and suffering, and funeral expenses. Uninsured motorist coverage may also, depending on your policy, provide coverage if you’re hit while riding a bicycle or walking. 
  • Uninsured motorist property damage — Covers repairs to (or replacement of) your damaged vehicle. A deductible may apply.

Uninsured motorist coverage limits and deductibles

Both types of uninsured motorist coverage are subject to a limit. The limit is a dollar amount that you choose when you add the coverage to your policy. It represents the maximum amount your insurance company will pay for a claim.

You’ll usually see an uninsured motorist bodily injury coverage limit expressed as two numbers, such as 100/300. This is shorthand for $100,000/$300,000.

The first number is the maximum amount the insurance company will pay per person. The second number is the maximum amount the company will pay for the entire accident. So, in the example above, your insurance company will pay no more than $100,000 for any individual, and no more than $300,000 combined for everyone in your car who’s injured.

The uninsured motorist property damage limit is a single number, say $25,000. In this case, the insurance company will pay no more than $25,000 to repair or replace your car. 

You may also need to pay a deductible for uninsured motorist property damage coverage. This is an amount of money you agree to pay toward the repair/replacement — your share of the costs. As with a limit, you choose the amount of your deductible when you add the coverage to your policy. 

So, for example, let’s say the cost to repair your car is $5,000, and your uninsured motorist property damage coverage has a $500 deductible. The insurance company will pay $4,500 for the repair, leaving you responsible for the final $500.

Boost coverage with stacked limits

In some states, and with some insurance companies, you have the option to “stack” your uninsured motorist coverage limits. This is simply a way to multiply your limits and increase the value of your coverage.

For an additional premium, your limits are multiplied by the number of vehicles on your policy. So, let’s say you have uninsured motorist coverage on a policy with two vehicles. Your uninsured motorist bodily injury limits are 50/100. If you get into an accident with an uninsured driver and file a claim, your uninsured motorist coverage limits will be stacked to 100/200.

Difference between uninsured and underinsured motorist coverage

Similar to uninsured motorist coverage is underinsured motorist coverage. As you might guess from the name, underinsured motorist coverage applies when the at-fault driver has liability insurance, but their limits are too low to fully cover your medical costs.

Let’s say you’re involved in an accident caused by another driver. That driver has insurance, but their bodily injury liability limits are set at your state’s minimum levels of $10,000 per person. With a hospital stay and physical therapy, bills related to your injuries reach $15,000. As this is more than the other driver’s $10,000 per person liability limit, your underinsured motorist coverage would cover the remaining $5,000. 

As with uninsured motorist coverage, your underinsured motorist coverage is subject to a limit — the maximum amount your insurance company will pay. Also, as these coverages are similar in function, they’re often bundled together by insurers.

Alternatives to uninsured motorist coverage

When considering how to protect yourself against uninsured drivers, you might also consider what personal injury protection (PIP) and collision coverage can do for you. 

PIP is another coverage that’s required in some states and optional in many others (see chart below). If you’re in an accident — regardless of who’s at fault — it covers medical bills for both you and your passengers, along with lost wages. You thus could consider PIP as an alternative to uninsured motorist bodily injury.

One caveat: PIP coverage limits are normally much lower than what’s available with uninsured motorist bodily injury. This means you (and your passengers) might end up paying out of pocket for at least some of the medical bills related to the accident. 

PIP also won’t pay to repair or replace your vehicle. However, collision coverage will.

Usually considered part of a “full coverage” policy (along with liability and comprehensive), collision is an optional coverage that pays to repair the damage to your car when it’s in an accident, no matter who’s at fault. So, if you’re in an accident caused by an uninsured driver, and you have collision coverage, your insurance company will pay to repair or replace your vehicle. Note that collision coverage does include a deductible. 

Collision won’t pay your medical bills or other expenses related to your personal recovery — you’ll still want to consider uninsured motorist bodily injury (or PIP) for those expenses. But you might consider collision as an alternative to uninsured motorist property damage coverage.

To better understand your coverage options, and be confident that your car insurance policy is optimized to protect you, consider discussing your needs with an agent. Licensed insurance agents are trained to match people with policies that suit their needs. Independent agents, furthermore, represent several companies and can help you shop around between companies to find the best combination of coverage and price.

State laws for uninsured and underinsured motorist coverage

According to the Insurance Information Institute, 20 states require uninsured motorist coverage as of 2021. Another 16 states require underinsured motorist coverage.

StateUninsured Motorist Required?Underinsured Motorist Required?PIP Required?
AlabamaNoNoNo
AlaskaNoNoNo
ArizonaNoNoYes
ArkansasNoNoNo
CaliforniaNoNoNo
ColoradoNoNoNo
ConnecticutYesYesNo
DelawareNoNoYes
Dist. of ColumbiaYesNoNo
FloridaNoNoYes
GeorgiaNoNoNo
HawaiiNoNoYes
IdahoNoNoNo
IllinoisYesYesNo
IndianaNoNoNo
IowaNoNoNo
KansasNoNoYes
KentuckyYesYesYes
LouisianaNoNoNo
MaineYesYesNo
MarylandYesYesYes
MassachusettsNoNoYes
MichiganNoNoYes
MinnesotaYesYesYes
MississippiNoNoNo
MissouriYesNoNo
MontanaNoNoNo
NebraskaYesYesNo
NevadaNoNoNo
New HampshireNoNoNo
New JerseyYesYesYes
New MexicoNoNoNo
New YorkYesYesYes
North CarolinaYesYesNo
North DakotaYesYesYes
OhioNoNoNo
OklahomaNoNoNo
OregonYesYesYes
PennsylvaniaNoNoYes
Rhode IslandNoNoNo
South CarolinaYesNoNo
South DakotaYesYesNo
TennesseeNoNoNo
TexasNoNoYes
UtahNoNoYes
VermontYesYesNo
VirginiaYesYesNo
WashingtonNoNoNo
West VirginiaYesYesNo
WisconsinYesNoNo
WyomingNoNoNo

Beyond this breakdown, many states have specific requirements regarding coverage limits and deductibles. Some states that don’t mandate the coverage do still require the insurance company or agent to offer it to you. If you want to reject the coverage, you may have to do so in writing. 

Your insurance company or agent should be well versed in the uninsured motorist coverage requirements for your state. However, if you’d like to check the requirements on your own, contact your state’s department of insurance.

What uninsured motorist coverage costs

The cost for uninsured motorist coverage will vary based partly on your chosen limits and deductibles (if applicable). The higher your chosen limits, the more you can expect to pay in premium. The lower your chosen deductible, the less you can expect to pay. The cost will also vary based on the frequency of uninsured drivers in your state. If your state is rife with uninsured drivers, you can expect to pay more for the coverage.

With all that said, uninsured motorist coverage is known for being relatively affordable. An analysis by carinsurance.com showed average annual premiums of $33 and $21 for uninsured motorist bodily injury and uninsured motorist property damage with lower limits, and $71 and $19, respectively, for the same coverages with higher limits.

Consider uninsured motorist coverage to protect yourself financially

Uninsured motorist coverage ensures you won’t have to pay out of pocket for your medical bills and other expenses if you’re in an accident caused by a driver without insurance. Mandatory in some states and optional in others, it’s a coverage worth considering to protect yourself financially when you drive. 

Frequently asked questions (FAQ)

Do I need uninsured motorist coverage if I have a full coverage car insurance policy?

If uninsured motorist coverage is optional in your state, you may consider dropping it from your policy. But you should consider how the other coverages on your policy might work if you’re involved in an accident caused by someone without car insurance.

A “full coverage” policy includes bodily injury and property damage liability (mandatory in most states), along with comprehensive and collision coverage. 

From a vehicle damage standpoint, collision coverage will pay to repair or replace your car if you’re in an accident with an uninsured driver. But it won’t pay your medical bills. For that, you’d need coverage such as personal injury protection (PIP) or medical payments (medpay). 

It’s always a good idea to discuss your coverage needs with an insurance agent.

Do I need uninsured motorist coverage if I have health insurance?

Your health insurance might be an alternative to uninsured motorist coverage (assuming uninsured motorist is optional in your state).

If you’re injured in an accident caused by a driver with no insurance, your health insurance should pay for your medical bills. Just remember that these payments will be subject to your health insurance policy’s deductible and coinsurance costs. If you’re young and healthy and have a high deductible health insurance policy, this means you might pay several thousand dollars out of pocket before your health insurer starts paying its share of your bills.

Of course, your health insurance won’t pay to repair or replace your damaged vehicle. If you choose to forego uninsured motorist coverage, and don’t have collision coverage, you’ll have to pay for repairs/replacement out of pocket.

Should I buy uninsured motorist coverage?

If the coverage is required by law in your state, then you have no choice. You need to have the coverage to drive legally.

Otherwise, you should consider having some form of insurance to protect yourself against uninsured drivers — whether that’s uninsured motorist coverage or the alternatives described in this article. 

According to a 2021 study by the Insurance Research Council, 13 percent of drivers (one in eight) are uninsured. The percentage varies by state, from 3.1% in New Jersey to 29.4% in Mississippi. So, chances are that every time you get behind the wheel, you’re sharing the road with uninsured drivers. You owe it to yourself to protect yourself if one of them causes an accident resulting in injuries or damage to your vehicle.

How much uninsured motorist coverage do I need?

States that require uninsured motorist coverage typically have minimum limits that you need to buy to drive legally. Beyond that, it’s common to have uninsured motorist limits equal to your policy’s liability limits.

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